(Reuters) - Pressure grew
on Wednesday for Boeing to compensate airlines in hard cash for
disruption caused by the grounding of its 787 Dreamliner as two airlines
maneuvered for immediate help instead of future purchase discounts.
Leading 787 customer All
Nippon Airways wants cash refunds, rather than discounts on future
orders, for losses inflicted by the worldwide grounding in place since
mid-January, a person familiar with the airline's intentions told
Reuters.
In India, a senior government source said state carrier Air India would take the same stand in favor of direct refunds.
All 50 Dreamliners
delivered worldwide since it entered service in late 2011 were idled
after separate incidents with the plane's battery at a U.S. airport and
on a domestic flight in Japan.
ANA operates 17 of those
aircraft and is likely to have been hit hardest by having them out of
service. The airline has cancelled more than 3,600 flights to the end of
May.
"ANA would prefer to have
the cash," said the person, who asked not to be identified, adding that
compensation talks with Boeing had not yet begun.
"This is not something we
have disclosed," said ANA spokesman Ryosei Nomura. "Nothing has been
decided regarding future talks with Boeing."
Air India has six of the $200 million jets and has ordered 21 more.
"We will obviously ask
for cash. We will negotiate once the planes start flying again," said
the senior Indian government source, who has direct knowledge of the
situation.
"Air India will surely ask for compensation. There is no question about it."
Boeing has yet to say if
it will compensate carriers for lost revenue from the 787's grounding.
Nor has it indicated how it would do this or how much it might pay.
Persuading customers to
accept discounts on future aircraft purchases would allow Boeing to
spread any reimbursement costs over several years. Airlines, though, may
see cash compensation as a quicker way to make up for their losses.
Boeing declined to comment on compensation issues.
"There's a singular focus
on getting the airplanes returned to service. Our customers want that
and we're working hard to achieve that," said spokesman Marc Birtel.
COMPLEX CONTRACTS
Boeing has reportedly
faced billions of dollars in fees for three years of delays in getting
the advanced 787 into service, mainly because of problems with a global
production system.
Just as with consumer
objects like cars, airlines receive a warranty which, while guaranteeing
repairs, doesn't typically oblige manufacturers to compensate for lost
business.
In a proforma warranty
attached to a regulatory filing on sales of smaller planes in the United
States, Boeing guarantees its products are free from defects in
material and design.
Significantly, these
include "selection of materials and the process of manufacture, in view
of the state of the art at the time of design." Battery experts have
said Boeing's choice of lithium-ion batteries was current when the 787
was designed.
When dealing with wing
cracks on its A380, Boeing's European rival Airbus initially said it
would repair parts under warranty and suggested it would not pay for
operational losses, but was forced to bow to demands for compensation.
Tim Clark, head of the
A380's largest operator, Emirates Airline, told reporters earlier this
month that Airbus "recognize the commercial distress that has put us
into."
Since airplane purchases
tend to be complex and can involve long-term ties, compromise is common.
When Boeing's 747-8 hit snags, instead of cancelling, Hong Kong's
Cathay Pacific came away with a good deal on brand-new 777s.
Delays caused by strikes or events outside manufacturers' control, such as earthquakes, are usually deemed "excusable".
LOSING MONEY
After ANA, which has
ordered another 66 Dreamliners, the biggest 787 operator is rival Japan
Airlines Co (JAL) with seven of the jetliners, and another 38 on order.
ANA has not said how much
the 787's grounding has cost it to date. It has a large cash buffer,
having raised $1.8 billion in a share sale last year to fund aircraft
purchases and possible acquisitions.
JAL President Yoshiharu
Ueki said on Tuesday the 787's grounding could knock 1.1 billion yen
($11.6 million) off the airline's operating profit for April-May, taking
the total hit since the grounding to 1.8 billion yen. In
October-December, the company had an operating profit of 46 billion yen.
Without yet having found
what caused the battery incidents in January, Boeing last week unveiled a
new battery system and predicted the 787 could be back in the air
within weeks - a forecast that ANA chief Osamu Shinobe described as a
best-case scenario as it remained unclear how long regulators will take
to approve Boeing's battery fix.
ANA estimates it may take
a month to fit the new battery systems to its 787 fleet - even after
Boeing completes certification testing, gains regulatory approvals and
ships all the parts and equipment to planes parked around the world.
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